Last November, two articles raised some fundamental questions about impact investing. “Impact Investing Benchmark: What’s ‘Impact Got to Do With It?’ (Paul DiLeo, Grassroots Capital Management) and “Impact Investing: Financial Returns are Only Half the Story” (by Roots of Impact’s Bjoern Struewer and Rory Tews) both begin as reactions to various specific points raised in a recent joint publication from Cambridge Associates and the Global Impact Investing Network (GIIN). But both articles quickly expand to address the important, broader debate that the report has spurred.

The Cambridge/GIIN report, published in June 2015, seeks to define, for the first time ever, a benchmark for impact investments. It provides detailed analysis of financial returns on “impact investments,” but curiously, it leaves social returns entirely in the eye of the beholder. And as Struewer and Tews note, “The [GIIN/Cambridge] report uses a self-reported ‘intention to generate social impact’ as the only impact-related inclusion criteria”—in other words, impact means whatever anyone says it means. DiLeo, for his part, forthrightly asks “why we bother to distinguish [impact investing] from conventional investing at all, other than for marketing purposes” if the only metric is shareholder returns.

Both articles acknowledge that impact assessment is complex, and that it would be unreasonable to expect that the first-ever attempt at an investment benchmark would or could be definitive. But as they also point out, benchmarks have a self-fulfilling quality: Once in general circulation, they become the target toward which the industry aims. Benchmarks don’t just describe market conditions; to a large extent, they shape them.

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